What's in his wallet?
We now look to be getting the widely anticipated additional stimulus from Abe & Co and the yen is selling off ahead of it.
On Friday the NFP went very wonky. From touching a high around 101.25 we then went on to drop down to 100.00 before going sideways as the market realised this wasn't a game changer for the Fed.
USDJPY H1 chart
101.25 held briefly again in Asia before breaking to move up to the next level at 101.45. That went too and then held as support before moving up to the 38.2 fib of the Brexit drop, which also held the 200 H1 and d 55 H4 ma's, around 101.80/90. Again, the break has found support there. We're messing around with another level I had pegged Friday at 102.16, and the high has come in against the 55 mma at 102.26.
So far it's been a very strong move but as is always the case with these front running moves, the market will reach a point where it runs out of steam and won't want to extend itself too far when we're still shy of details, and there's plenty of room for disappointment from Japan.
If we don't see 102.25/30 broken over the next few hours then look to see some profit taking down to 102.00 and maybe the 101.80/90 area. While we wait to see what Japan announces, expect the pair to keep a bid tone.
